Legislative Update

Monday, February 23, 2015
February 23, 2015 Legislative Update

Wintery Weather Slows General Assembly Activity

The winter weather last week resulted in cancellation of the majority of legislative business. Most committees were cancelled and the House and Senate held limited sessions to deal with a handful of bills.

Economic Development Package Forthcoming

The highly anticipated economic development package from the House Republicans is expected to be filed this week. There have been several different versions being debated internally within the House. Speculation indicates that the package will include expansion of the Job Development Investment Grant program (JDIG), authorization for crowd funding investment and provisions changing the way in which the state calculates business taxes. The senior chairman of the House Finance Committee, Rep. Bill Brawley (R-Mecklenburg) stated last week “We will get it done when we think we get it right.”

Senate Passes Unemployment Insurance Changes

The Senate passed Senate Bill 15-Unemployment Insurance Law Changes with a vote of 40-6. The legislation makes several changes to the unemployment insurance laws, including a provision that would require unemployment beneficiaries to create additional job contacts with potential employers. Current law requires beneficiaries to seek work on at least two different days of the week and to make at least two potential job contacts. The new legislation would require beneficiaries to make at least five job contacts a week. Other changes within the proposal would implement a cross-checking and photo ID measure to identity benefit eligibility and staggers terms on the state board with oversight.

Senate to Propose Workforce Development Study

Senator Tillman (R-Randolph), a member of the new Senate Workforce & Economic Development Committee stated last week that he would be pushing a new study bill to look at the plausibility of moving all of the state’s workforce development programs under the authority of the community college system. The workforce development system currently consists of 17 programs administered by five state agencies.

New Common Core Public Survey

The Department of Public Instruction (DPI) unveiled last week an online survey for the public’s feedback on K-12 English language arts and math standards as they continue to debate common core standards. The public can provide anonymous feedback through April 30th through: http://ncdpireview.weebly.com/. State Superintendent June Atkinson stated in a press release: "We need to hear from parents and the broader community as we move forward with reviews of our content standards to make sure that standards help students reach high goals and prepare for the future." 

Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, February 16, 2015
February 16, 2015 Legislative Update

General Assembly Begins Budget Talks

The 2015 state budget process began last week with joint appropriation committee meetings on various budget subject areas. Lawmakers began to explore and evaluate programs to identify key issues with the budget. Legislators received an early revenue forecast and budget outlook for 2015-2015. Highlights include:

  • $271 Million: The latest state revenue forecast anticipates collections for the current fiscal year to come in about $271 million below the $21 billion the General Assembly budgeted for the year. *This figure is a cautious approach with the forecast assuming that April 15 tax filings will result in lower refunds and higher final payments by individual income taxpayer but could rise or fall as a result of April’s tax collections.
  • $450 Million: The shortfall in the 2013-2014 fiscal years was about $450 million.
  • $800 Million: The state has more than $800 million set aside in Medicaid reserves and “rainy day” funds they could tap if necessary.
  • $21.4 Billion: Prediction of the 2015-2015 fiscal year budget. Using current year spending as a base, $541 million would be left in additional revenue.

The official budget process will begin with Governor McCrory's budget proposal, which is expected to be released by the end of February. After the Governor's proposal, the House will draft their budget proposal, followed by the Senate, before the House and Senate form a conference committee to work out differences between the budget plans.

Senate Passes Gas Tax Proposal

The Senate passed Senate Bill 20 late last week, a proposal which would cut 2.5 cents in the state’s gas tax and add a new minimum rate that would keep it from decreasing. The gas tax would be reduced on March 1st from the current 37.5 cents per gallon to 35 cents, which would become the new minimum rate. Consensus forecasts provided by economists for the legislature and the administration of Gov. Pat McCrory, predict the change would generate about $1.2 billion in additional revenue over the next four years for the state Department of Transportation.

The proposal is an $8 million-plus savings plan that would be achieved by cutting 500 occupied jobs and 50 vacancies within the Department of Transportation. It puts layoff priority on DOT administration staffers, maintenance jobs that could be outsourced and positions that allow the agency to reduce management layers, with a March 1st deadline for eliminations. Governor McCrory has stated that the legislation would “help protect and stabilize transportation” for roads and bridge but he also indicated concerns about the DOT layoff provisions, saying, “We need to fully evaluate the impact that workforce decisions will have on the safety and maintenance of our transportation network.” Department of Transportation Secretary Tata responded to the proposal with saying, “500 positions sounds like too many”, but that his staff is trying to determine how many jobs can be eliminated. Tata has asked the General Assembly leaders not to mandate the number of workers to be cut saying, “Let me take a look at DOT and our mission and come back to you with what I think is reasonable.”

Update-House Pushes Eminent Domain Again

The first part of the substantial piece of legislation filed this session was House Bill 3-Eminent Domain, sponsored by Rep. Chuck McGrady (R-Henderson). The measure would curtail eminent domain powers by saying the state could forcibly take land only for a public use, not a public purpose, outlawing where private property was being condemned and sold to private developers. Governments would still be able to take land for schools, roads and other public purposes. The proposal, if passed, would place an eminent domain constitutional amendment on the May 3, 2016 primary election ballot.

The House, in a 113-5 vote last week, passed House Bill 3 and now goes to the Senate for consideration.  

Tax Credits Debate Begins
While the House and Senate continue to debate on economic development packages, the House Democratic leaders filed a 61-page bill last week containing a package of tax credits. The proposal includes:

  • Earned Income Tax Credit for Low-Wage Workers
  • Historic Preservation Tax Credit
  • Film Production Tax Credit
  • Department of Commerce Job Catalyst Fund
Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Monday, February 9, 2015
February 9, 2015 Legislative Update

General Assembly Gears up for 2015 Session

The North Carolina General Assembly convened for a one day organizational session on Wednesday, January 14, in order to elect their chamber leaders and take the oath of office.

As expected, Senator Phil Berger (R-Rockingham) was elected to his third time as president pro tempore of the Senate. Representative Tim Moore (R-Cleveland), an attorney from Kings Mountain was elected by the House of Representatives to serve as the Speaker of the House for the biennium.

Legislators took off two weeks off to finalize committee assignments and other organizational matters, returning again on Wednesday, January 28. Chamber leaders Sen. Berger and Speaker Moore have said that some of the top issues they will tackle in 2015 include Medicaid reform, job creation policies, and the budget.

Click here to view the 2015-2016 House committee assignments.

Governor McCrory Delivers State of the State

Governor McCrory delivered his State of the State address to the House and Senate last week, highlighting plans for creating jobs, raising expectations and rewards for education, and long-term transportation funding.  Five guiding principles in the governor’s message were:  creating jobs, ensuring people have the education they need to be productive citizens, connecting small towns with urban centers through roads and technology, improving health and safety and cutting government inefficiencies.

  • Economy & Incentives: The governor said he needs the legislature to provide funding for incentives to lure businesses. He said that was needed within a matter of weeks, not months. Reference to the governor’s  N.C. Competes program as it is designed to create long-term sustainable jobs by using university research to attract new capital and focus on the parts of the state that are lagging in jobs.
  • Education: McCrory vowed to raise teacher base pay to $35,000, eliminate unnecessary testing, bring Wi-Fi into classrooms, speed teacher certification and increase commercial potential for university research. 
  • Transportation: The governor reiterated that he would request that the General Assembly approve a $1.2 billion bond to pay for additional infrastructure projects and an additional $1.4 billion bond to repair and replace state buildings. Per transportation, the $1.2 billion bond proposal would allow for quicker construction of projects in the state's 25-year transportation plan, for those that with environmental documents in place and that score the highest within the state’s mobility formula. In addition to the bonds, the governor also said he supports efforts to protect and stabilize existing transportation revenue streams, while also looking at funding reform and alternatives for future transportation needs.
  • New State Departments: McCrory pushed for the creation of two new state departments-one to manage information technology overhaul and the other to focus on military and veteran needs. The newly proposed Department of Military and Veterans Affairs would replace the Department of Administration’s Division of Veterans Affairs. The newly proposed Department of Information of Technology, which would elevate the Office of Information Technology Services, wherein all cabinet-agency IT staffers would work for the new department.

Common Core Oversight Commission Receives Appropriation

The Senate passed Senate Bill 14, which directs the Department of Public Instruction to transfer $275,000 to the Common Core Commission, which was setup to rewrite math and reading standards that currently follow Common Core standards. The bill additionally transfers $100,000 from the State Board of Education to the Rules Review Commission to enable to the commission to defend the lawsuit the education board filed against it. In addition, clarification is reiterated that the open meetings law applies to the Common Core Commission, requiring them to stream their meetings.

House Revisits Eminent Domain Legislation

The first piece of substantial piece of legislation filed this session was House Bill 3-Eminent Domain, sponsored by Rep. Chuck McGrady (R-Henderson). The measure would curtail eminent domain powers by saying the state could forcibly take land only for a public use, not a public purpose, outlawing where private property was being condemned and sold to private developers. Governments would still be able to take land for schools, roads, and other public purposes. The proposal, if passed, would place an eminent domain constitutional amendment on the May 3, 2016 primary election ballot.


Posted by: Kerri Burke, McGuire Woods Consulting LLC @ 12:00:00 am  Comments (0)
Wednesday, January 14, 2015
Legislative Agenda Task Force Committee’s 2015 Draft Legislative Agenda Approved

The 2014-2015 Legislative Agenda Task Force, chaired by Luther Moore of Belk, Inc., concluded its series of meetings on Friday, January 9th with a proposed draft legislative agenda for 2015. The meetings began at the beginning of December 2014 and gave all Charlotte Chamber members and partnership organizations the opportunity to present the legislative priorities of their organization, to be considered for inclusion in the Charlotte Chamber’s final legislative agenda. On Monday, January 12th, the Charlotte Chamber Executive Committee unanimously approved the draft legislative agenda. The agenda will be shared with members via our website and email newsletters. Additionally, the Public Policy staff and volunteers will communicate with members of the Mecklenburg Legislative Delegation and other legislators about priority issues for Charlotte Chamber members. The General Assembly convenes today to elect its leadership and will return on January 28th for the official start of the session.

The Task Force met six different times at the Belk Headquarters in southwest Charlotte, for a total of 20 presentations. The legislative priorities presented to the committee centered around five main areas: Job Creation, Taxes, Transportation, Regulatory Reform and Education. Regarding Job Creation, the Charlotte Chamber will urge lawmakers to quickly address the Job Development Investment Grant program to keep us competitive in the recruitment of new and expanding companies. We will also advocate for other tools needed for our state’s economic developers to be competitive. We will work on efforts to address the expiration of the sales tax cap on jet fuel which impacts American Airlines. Charlotte Douglas International Airport and the number of flights American Airlines brings in and out of our community are the single biggest factor in our economic development efforts.

Under the Taxes heading, we will continue our long-time advocacy to lower the corporate and personal income taxes. Additionally, we will support efforts of the legislative leadership, as they develop a NC tax code that has a positive overall impact on economic growth. NC needs a competitive tax position which provides certainty and limits tax on business to business services.

The chamber’s Transportation agenda will continue to include advocacy for the funding needed to complete major transportation projects in the Charlotte region including road projects such as the Monroe Bypass, an additional connection to Gaston County over the Catawba River, widening of I-77, as well as our regional public transportation vision.  We will work with legislative leaders in support of the Strategic Transportation Investments prioritization policies as they passed last session and we will support their efforts to enhance funding from existing transportation sources to address transportation infrastructure needs.

We will continue to work with legislative leaders on Regulatory Reform issues in an effort to encourage economic growth.  Those issues include, but are not limited to, a balance civil liability system including the elimination of joint and several liability and the collateral source rule, zoning regulation reforms that encourage commercial and residential development, policies that promote innovation and new opportunities in the “sharing economy” while protecting public safety, and a review of our judicial system and the funding needed for it to be effectively administered.

Our Education agenda continues to include support of Charlotte Mecklenburg Schools, Central Piedmont Community College and UNC Charlotte.  We support continued reform of the teacher compensation system to ensure we remain competitive in those jobs along with continued funding of classroom growth at all levels: pre-K, K-12, community colleges and universities.  We also would like to see additional flexibilities offered at our local institutions in managing budgets, employees and creating innovation for academic success.  We continue to support high standards for academic achievement that aid in the development of a competitive workforce.

All chamber members are invited to participate in the process for setting the agenda and are encouraged to participate in the advocacy.  Please contact a member of the Public Policy team if you are interested.

Posted by: Laura Guacci @ 12:00:00 am  Comments (0)
Wednesday, September 3, 2014
September 3, 2014 Legislative Update

Lawmakers Return Home for Campaigns as General Assembly Officially Adjourns

The General Assembly officially adjourned the evening of Wednesday (8/20), marking the official end of the 2014 short session. The adjournment resolution passed by the House and Senate does not establish a November special session on Medicaid reform, as was previously discussed. The extended short session, of which was first projected to end by July 4th, resulted in 572 new laws during the two-year session.

Before adjourning, several last minutes measures passed, including modifications to the Jobs Maintenance & Capital Development Fund (JMAC); a compromised coal ash cleanup agreement; and tweaks to the processes of the NC Division of Employment Security.

  • JMAC Modifications
    Legislators resurrected and passed a previous version of SB3, JMAC Modifications, which expands the JMAC Fund in order to finance a grant for Haywood County employer Evergreen Packaging. Evergreen Packing currently has to invest in environmental upgrades in order to stay in compliance with new federal EPA rules.
  • Coal Ash Compromise
    After House and Senate conference committee members of SB729, Coal Ash Management Act of 2014, announced in early August that they would not be able to come up with a compromise plan on how the state could clean up coal ash pond, most political pundits deemed the issue “dead” for 2014. However, on the final days of the legislative session a compromise was reached between the House and Senate and passed each chamber, 84-13 in the House and 38-2 in the Senate.
    *See additional details below.
  • NC Division of Employment Security
    Lawmakers passed the last day of session SB42, Confidentiality of UC Information, which ensures that the NC Division of Employment Security will not violate federal regulations. The law prohibits Employment Security from making hearing notices of contested unemployment cases available to employment law attorneys. The U.S. Labor Department had issued an opinion finding that making the notices available would violate federal regulations regarding dissemination of confidential information, there by jeopardizing the Employment Security’s federal dollars.

House Rejects Department of Commerce Incentives Package

Before leaving, the House with a bi-partisan vote (47-54) voted down HB1224, Local Sales Tax Options/Economic Development Changes. The bill, as reported last week was a comprehensive package of economic incentives and tax changes. The proposal included the creation of the Job Catalysts Fund for the Department of Commerce, a fund that would set aside $20 million to help lure businesses to the state; it was commonly called a “closing fund.” In addition, included was the proposal to limit the local sales tax rate for counties. NC Department of Commerce Secretary Sharon Decker was a vocal proponent of the bill, arguing it was necessary to bring large projects to the state. While the measure it is technically dead until the next legislative session in January 2015, the Governor has the authority to call back the General Assembly for a “special session”. House Speaker Tillis has alluded to the possibility of the Governor calling the General Assembly back this fall for a special session on economic development measures.

Coal Ash Compromise Awaits Governor’s Approval

Per above, House and Senate leaders reached a compromise during the final hours of the legislative session on a stalled coal ash reform bill. Key provisions of the compromised package regulating coal ash ponds include:

  • Coal Ash Oversight Commission: Established within the Department of Public Safety (House had originally wanted the commission with the Department of Natural and Environmental Resources). The new commission is authorized to grant three-year, instead of open-ended, extensions of the 15-year timetable for pond closures. The Senate leader will appoint three of the Coal Ash Management Commission's nine members, the House leader another three, and the governor three more, all for six-year terms.
  • Rate Increases Moratorium: The moratorium on Duke Energy rate increases to pay for coal ash cleanup would expire in January 2015, vs December 2016 of which the House had advocated for.
  • Coal Ash Pond Expansion: The construction or expansion of coal ash impounds is banned, effective October 1st.
  • Risk Categories: DENR is instructed, by the end of 2015 to divide coal ash sites into high, intermediate, and low-risk categories. High-risk sites must be excavated and place in a lined landfill by the end of 2019 and intermediate sites by 2024. Low-risk sites can be “capped”, which is intended to keep eater from carrying the ash into water supply.

What Did the General Assembly Leave on the Table?

While the legislative “short session” was not technically short, several policy issues that were debated did not make the cut before adjournment. Those high-profile legislative issues that did not pass include:

  • Medicaid Reform
    After a study commission was created by the General Assembly in 2014 to create a plan for Medicaid reform, and both the House and Senate, came up with their own versions of a plan for Medicaid reform in 2014, nothing passed both chambers before adjournment. The budget included a provision stating the General Assembly’s intent to come back in November for a special session focused on the topic, however in the end the General Assembly did not pass a resolution for the special session. The issue will be carried over until the 2014 legislative session
  • Teacher Assistants
    Due to a mistake on the wording of language on the funding of teacher assistants in the budget, restrictions are currently in place on how school districts can fund teacher assistants. Legislators from both chambers had come up with a bill to fix the budget language, but the Senate made it conditional on the passage of HB 1224. After the House voted down HB 1224, the issue was never resolved. Governor McCrory potentially could resolve the issue with an executive order.
  • Film Incentives
    In the budget a $10 million film grant program was passed, that will go into effect on January 1, when the current tax credit will sunset. Much of the film industry lobbied for an extension of the current tax credit, and even with several attempts by House members to extend the credit program, it never succeeded.
  • Autism Insurance Coverage
    A bill to require health benefit plans to cover autism treatment did not pass the Senate after passing the House during the 2013 legislative session.
  • Puppy Mills
    A bill that First Lady Ann McCrory lobbied for, HB 930, Dog Breeding Standards/Law Enforcement Tools, ever passed the Senate. The bill, which would set standards for large commercial breeders in order to fight puppy mills, passed the House in 2013 on a strong bi-partisan basis, 101-14.
  • Crowd Funding
    An economic development measure that would have allowed companies to raise capital via crowd funding failed within the larger package of HB 1224.




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